UK Construction Media

When taking risks on people becomes risky

News   •   Aug 17, 2017 09:21 BST

The talent shortages presenting a significant risk to many UK organisations are well documented. In the construction sector, output is anticipated to grow at an average of 1.7% over the next four years, outpacing average construction employment which lags at just 0.6% over the same period.[1] What’s more, RICS figures suggest that the UK construction industry could lose almost 200,000 EU workers – 8% of its workforce - post-Brexit should Britain lose access to the single market.[2] However, when it comes to effective talent management, an unwillingness to take calculated risks on people can present a problem in itself.

Stepping out of a risk averse mind-setTo develop and grow, people need to be given opportunities to stretch themselves beyond their current capability, with the appropriate support mechanisms in place as a safety net. However, industries reliant upon STEM skills, where the flow of talent is already in short supply, tend to be understandably risk averse.

Perhaps due to the safety critical nature of the work, or expectations of clients, or as a symptom of an already stretched system, when resourcing projects there’s a tendency to go to the safest pair of hands. ‘Tried and tested’ employees who’ve delivered that type of project before. Whilst this approach is a safe short-term solution, it neglects the longer-term need to develop people, and, importantly, bring them through.

The result? Thin talent pipelines, with insufficient volumes moving through to keep them healthy. Poor talent attraction and retention too, since newly qualified individuals tend to have expectations of rapid career progression and a constant flow of development opportunities. The combination of inadequate supply and deficient succession planning has led to many firms operating with critical holes or ‘pinch points’ in their pipeline, whilst also losing talent due to an inability to fulfil expectations of accelerated career development.

According to construction executives, risks relating to ‘workforce management and talent optimisation’ are the second biggest threat facing their business over the next 10 years.[3]

Short-term approach to talentKiddy & Partners has conducted a series of interviews with HR Directors and Heads of Talent in industries facing talent shortages, including construction. This revealed that a short-term approach to talent management, whereby current performance is prioritised over longer-term considerations, acts a key limitation affecting the health of prospective talent pipelines in many of these safety critical industries. In the words of one interviewee:

Getting people to think beyond the next deadline, beyond the next quarter, to think more strategically, and risk assure the business in that length of time…we can be particularly short sighted, focused on the next quarter to the detriment of other things.”

So what can be done to reduce the risks associated with talent and skill shortages? To help business leaders make key decisions around talent, HR have a responsibility to provide accurate data about who they’ve got, where, and how this capability meets current and future business needs. Without the right information and insight, firms can’t make effective decisions on human capital management.

Thinking about talent management differentlyEmployers can no longer afford to wait for others to find a solution to talent shortage, but must take a lead in exploring new approaches to closing the skills gap, such as applying principles of supply chain management to the talent pipeline. By identifying the core capabilities needed to achieve the business strategy, and comparing this against current capability, a talent supply chain approach allows organisations to make informed “make and buy” decisions to determine what can be “made” in-house through development and what must be “bought” through recruitment.

Making perfect predictions in a rapidly changing environment is hard. So, a combination of approaches is inevitable. Internal talent development activities such as training, mentoring, and other on-the-job programmes should be designed to meet predicable needs as far as possible. Supplementing these with external hiring for meeting unpredicted demands, and optimising the gig economy for resourcing non-strategic roles, is essential.

In addition, partnerships with other firms in the supply chain may enable employers to provide new recruits with a more rounded experience than otherwise possible, through inter-organisational talent mobility.

The supply chain approachWithin a supply chain approach, talent development can be optimised by removing any unnecessary elements that may increase training costs without adding value. Subsequently, the efficiency of development is enhanced by targeting development activities based on an accurate assessment of development needs.

The reality, however, is that much development occurs without a robust analysis of the need. This is not just current, but future needs, and in line with the business’ strategy. This results in development becoming less efficient and a diminished return on investment. The absence of a proper needs analysis up front is often compounded by a lack of training evaluation, so the inefficient investment in development goes unchecked.

In reality, wasted development spend is only the tip of the iceberg. A lack of rigour in development increases the risk that employees don’t have the capability to perform well. A skills drift develops, turning into a very imminent risk for the business, which in this industry, can mean missed project deadlines, overspent budgets, or worse, poor quality or unsafe construction.

A new approach to talent management

So how can construction organisations move towards a more proactive approach to talent management?

  • Be proactive. Ensure that talent development is closely aligned not only to current, but also future, business needs
  • Identify appropriately stretching opportunities to help employees develop their capability
  • Ensure that sufficient scaffolding is in place to support employees, following a ‘fail safe’ philosophy by having regular monitoring and review points in place to provide an appropriate safety net

Taking these steps mean that construction businesses can gain more visibility over their talent needs, close gaps and move their people forward confidently, strategically. This breaks the skills cycle facing the sector; not taking a risk on people is a risk in itself.

The full white paper is available here.
Article submitted by Dr Zara Whysall, Business Psychologist, Head of Research at Kiddy & Partners.

[1] CITB (2017). Industry Insights: Construction Skills Network Forecasts 2017–2021 http://www.citb.co.uk/documents/research/csn%202017-2021/csn-national-2017.pdf

[2] RICS (2017). Press Release: UK construction industry could lose 8% of workforce post-Brexit, 15 March 2017 http://www.rics.org/uk/news/news-insight/press-releases/uk-construction-industry-could-lose-8-of-workforce-post-brexit-new-rics-figures-reveal-/

[3] Willis Towers Watson (2017). Deconstructing risk: Construction Risk Index 2017 https://www.willistowerswatson.com/en/insights/2017/04/construction-risk-index-2017